September 29, 2008
Higher Testosterone Men Greater Financial Risk Takers

In the future will genetically engineered male offspring have higher testosterone and greater risk taking tendencies? Will we see more financial disasters as a result but also a higher rate of innovation? Higher testosterone correlates with more risk taking behavior with money.

CAMBRIDGE, Mass., September 29, 2008 Higher levels of testosterone are correlated with financial risk-taking behavior, according to a new study in which men's testosterone levels were assessed before participation in an investment game. The findings help to shed light on the evolutionary function and biological origins of risk taking.

The study was jointly led by Anna Dreber, of the Program in Evolutionary Dynamics at Harvard University and the Stockholm School of Economics, and Coren Apicella, of Harvard's Department of Anthropology. The results are available online in Evolution and Human Behavior.

This is an unsurprising result for anyone who doesn't buy the idea that environment programs all of our sexual differences in behavior.

These were Harvard students. What I'd like to know: How do testosterone levels vary as a function of degree of exclusivity of a college? Does State U have lower or higher testosterone guys than Harvard or Yale? Also, do MIT and CalTech have lower or higher testosterone males than the Ivy League? What about the females? I'm betting female English students have lower testosterone than female engineering students.

In the study, saliva samples were taken from 98 males, ages 18 to 23, who were mostly Harvard students. The samples were taken before participation in the investment game, so the researchers were certain that testosterone levels were not elevated as a result of the game. The researchers also assessed facial masculinity, associated with testosterone levels at puberty.

All of the participants were given $250, and were asked to choose an amount between $0 and $250 to invest. The participants kept the money that was not invested. A coin toss determined the investment's outcome, and if the participant lost the coin toss, the money allocated to the investment was lost. However, if the coin toss was won, the participant would receive two and a half times the amount of their investment. At the end of the study, one person was selected by lottery to receive the cash amount of their investment, which created a monetary incentive for the participants.

The researchers found that a man whose testosterone levels were more than one standard deviation above the mean invested 12 percent more than the average man into the risky investment. A man with a facial masculinity score of one standard deviation higher than the mean invested 6 percent more than the average man.

Do investment bankers and hedge fund operators have higher testosterone than commercial bank executives? Do the former CEOs of failed banks have higher or lower testosterone than CEOs of successful banks?

Men take risks in order to raise their wealth and appeal in the eyes of women.

"Financial risk might be comparable to other risky male behaviors associated with reproduction," says Apicella. "Men may be more willing to take financial risks because the payoffs, in terms of attracting mates, could be higher for them. This is because women value wealth more than men when choosing for a mate."

So then if men cause financial disasters women made them do it.

Here is the abstract. You can find the full article at that link. Note the 2D:4D probably refers to fingers whose lengths differ based on fetal testosterone exposure.

Many human behaviors, from mating to food acquisition and aggressiveness, entail some degree of risk. Testosterone, a steroid hormone, has been implicated in a wide range of such behaviors in men. However, little is known about the specific relationship between testosterone and risk preferences. In this article, we explore the relationship between prenatal and pubertal testosterone exposure, current testosterone, and financial risk preferences in men. Using a sample of 98 men, we find that risk-taking in an investment game with potential for real monetary payoffs correlates positively with salivary testosterone levels and facial masculinity, with the latter being a proxy of pubertal hormone exposure. 2D:4D, which has been proposed as a proxy for prenatal hormone exposure, did not correlate significantly with risk preferences. Although this is a study of association, the results may shed light on biological determinants of risk preferences.

Share |      Randall Parker, 2008 September 29 01:36 PM  Brain Economics


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